Louise Murphy

NEET estimates for Q4 2025 from ONS this morning. We already pretty much had the picture for Q4 from the main stats release last week (rising unemp) but let's run through the charts. And then zoom out.

First - the number crept up ever so slightly. Importantly for comms the number remains below 1m.

So while headline writers will be interested in how close tomorrow’s NEETs number is to one million, the substance deserves proper attention.

Stay tuned for more @resolutionfoundation.org analysis from @nyecominetti.bsky.social tomorrow, responding to the new ONS data.

Chart showing - Minimum wages as a share of median hourly pay: UK

5. Finally, the jobs market matters too, and the cost of hiring a young person has risen. We think the Government should pause convergence of youth and main minimum wage rates until youth unemployment starts falling.

Chart showing - Change in apprenticeship starts, by age and level: England 2017/18 and 2024/25

4. For young people not bound for university, opportunities are not guaranteed. Apprenticeships have shifted from being a launchpad for young people to being a ladder for older workers. Policy should tilt apprenticeships back towards young people, e.g. by reverting to an age-based funding formula.

Chart showing - Proportion of 16-17-year-olds who are NEET or not known, in England and for top 10 and bottom 10 local authorities: England, 2025

3. Many young people then slip through the gaps. Despite mandatory participation legislation, NEET rates among 16-17-year-olds have not budged in recent years and are unequal across the country. We need to do more to track and re-engage these young people.

Chart showing - Proportion of pupils not achieving main ‘success’ measures at GCSE level: England

2. And our education system does not help – too many young people fail at the binary GCSE period, and re-sit success rates are woeful. We need to better support young people when they re-sit Maths and English GCSEs.

Chart showing - Proportion of the working-age population that classify as disabled and whose main health condition is a mental health problem, by single year of age: UK

So what should we do about it? Here are five priority areas:

1. Children and young people’s mental health is getting worse - we need to improve mental health support in schools and colleges to prevent young people from becoming NEET in the first place.

Chart showing - Youth unemployment rate: selected OECD countries

…but it also reflects a more recent demand problem, with youth *unemployment* in the UK rising and now sitting above the EU average.

Chart showing - Number of 16-24-year-olds who are NEET, by economic status: UK

This high NEET rate is partly structural – reflecting the rising number of young people out of work due to ill health…

Chart showing - Number (left) and proportion (right) of young people aged 16-24 who are NEET: UK

The number of young people who are NEET has risen rapidly since the Covid-era low point, and in the last data release there were just under a million (946,000) young people out of work, education or training.

Tomorrow the ONS will publish new data on the number of young people who are not in education, employment or training (NEET). This is important – and not just because the number is very close to one million…

Youth unemployment is at its highest level in over a decade - here’s our @resolutionfoundation.org take on today’s labour market stats

🚨 New Living Standards Outlook published today! 🚨

This year will see a welcome boost to living standards... which we sadly expect to be short-lived.

@louisemurphy.bsky.social explains 👇 buff.ly/siFTYAC

Unsung Britain Final Conference • Resolution Foundation The 13 million working-age families across the poorest half of the country, who at various times have been dubbed the ‘squeezed middle’, ‘just about managing families’ and ‘alarm clock Britain’ are…

And listen in to our Unsung Britain conference, focusing on the lives of the 13 million working-age families across the poorest half of the country, starting at 9am this morning: www.resolutionfoundation.org/events/unsun...

Read more in our new Living Standards Outlook, published today: www.resolutionfoundation.org/publications...

What would be a coherent strategy for improving living standards?

1. Prioritise stronger growth as the central objective...

But also:

2. Reform the tax and benefits system to share gains across the distribution
3. Ease cost of living pressures so that families feel improvements in the near term

Chart showing: Annual growth in earnings (real and nominal) and CPI inflation, outturn and forecast: UK

However, as things stand the living standards outlook is set to worsen later in the decade.

This is unsurprising given the OBR's expectation of dismal real wage growth.

If wage growth turns out to be higher - e.g. as the Bank of England expects - this would be good news for living standards.

Chart showing: Annual real growth in median equivalised household disposable income after housing costs for non-pensioners, by income group: UK

But we expect some good news over the coming year, especially for families in the lower half of the income distribution.

This strong income growth largely reflects the above-inflation boost to UC coming this April, and the ending of the two-child limit.

Chart showing: Annual change in Real Household Disposable Income per household in various OBR forecasts

Families across Britain have experienced two decades of poor income growth, and the outlook for the rest of the 2020s isn't much better.

In fact, the OBR's projection for income growth for the rest of this decade is worse than any of its previous ones...

Look, I know there's a lot going on in the news right now. But the MPC decision today was actually quite interesting!

They were only one vote away from delivering a cut that wasn't on the cards at all, and they now think inflation will not just drop sharply this year but stay low.

Thread below ⤵️

Our new report on Universal Credit is out today. We worked with participants from @changingrealities.bsky.social to develop 16 recommendations for how outcomes for and experiences of UC claimants can be improved.

This thread has the details!

The latest USoc wave lets us split out the Covid years from what came after.

So striking that they look the same!

Average mental ill health (based on a general screening instrument) is no better now than during the lockdown years, at any age. @alexbryson.bsky.social @dannyblanchy.bsky.social

Postdoctoral Research Associate in Work, Welfare & Mental Health at King's College London Apply now for the Postdoctoral Research Associate in Work, Welfare & Mental Health role on jobs.ac.uk - the leading job board for higher education jobs. View details.

Job opportunity - we need a fab new colleague to do quant research on work, welfare and mental health within
@kingscsmh.bsky.social (closes 8 Feb)

This is funded until Apr/28, but we'll support you in bids to extend it - please do circulate to suitable ppl!
www.jobs.ac.uk/job/DQD294/p...

Today’s labour market stats show a weakening jobs market, with rising unemployment and flatlining real pay. Some @resolutionfoundation.org key takeaways from me and @louisemurphy.bsky.social 🧵 ...

Labour Market Outlook Q4 2025 • Resolution Foundation Employment has fallen over the past two years and is substantially lower than it was before the pandemic. Perhaps surprisingly given its central place in policy debates, participation is essentially u...

Have written a piece teeing up tomorrow's labour market stats, pointing out the sort-of obvious - that we currently have a problem with unemployment (i.e. demand) not just participation (i.e. supply). www.resolutionfoundation.org/publications...

It's great that DWP is publishing this data, allowing us to better understand what is really going on.

But it shows that DWP has a new challenge on its hands: is it prepared enough to support the 1m people who were previously claiming ESA, many of whom have been out of work for a long time?

Chart showing: Proportion of UC Health caseload that are in the LCWRA group (left) and UC Work Capability Assessment decisions that have an outcome of LCWRA (right): Great Britain, January-August 2025

Finally, migration from ESA to UC is also affecting the makeup of the UC Health group, since those who move from ESA to UC are more likely than other claimants to be in the LCWRA group (where they receive greater financial support from the benefits system and are not expected to look for work).

Chart showing: Number of UC Work Capability Assessment decisions, among those who have transitioned from ESA and other UC claimants: Great Britain

We see a similar trend when we look at Work Capability Assessments (WCAs).

We saw an uptick in the number of UC WCAs taking place each month during the pandemic period, mainly among new claimants.

But in recent months, the rise in UC WCAs reflects a surge in WCAs for people moving from ESA to UC.

Chart showing: Change in UC Health caseload since September 2024, among those who have transitioned from ESA and other UC claimants: Great Britain

But when we look at the increase in UC Health caseload *over the past year*, migration from ESA is doing more work.

More than two-thirds of the rise in caseload since September 2024 relates to those moving from ESA to UC (639k of the total 933k rise).

Chart showing: UC Health caseload, among those who have transitioned from ESA and other UC claimants: Great Britain

Since the start of 2020, the UC Health caseload has increased by 2.6m, and most of the rise relates to those who are *not* moving to UC straight from ESA (ie either new claimants, or people moving from other benefits).